Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The KEEP scheme is not for the wealthy elite. The KEEP scheme was designed for people working in a particular sector. The challenge for smaller companies in that sector is that they are not able to hold on to their staff. Staff retention is a major issue in many sectors. The objective here is to give an employee the opportunity to take shares as part payment of their salary in effect. It is not that they are avoiding tax on that. The Senator seems to be hinting that people are avoiding paying tax or that the scheme is hollowing out the tax base. They pay tax on the shares when they exit and move off the shares, like many other investors. This was designed to help those working with smaller companies have an incentive to stay with that corporate group, rather than be challenged by the larger entities that are household names and that gobble up the staff.

In the circumstances the Senator outlined, somebody can receive shares in a company or holding company within a group. The measure reflects what has emerged from the comprehensive stakeholder consultation held this year. This was an SME event hosted by officials in June which allowed representatives of the sector to put forward their views on the changes required in KEEP and the incentives. The KEEP scheme was not working as we wanted it to work, which was to make it easier for small and medium-sized enterprises hold on to their staff.